The purpose of the Sarbanes-Oxley Act of 2002 is to:
a. protect companies from demands of investors, stockholders, and creditors.
b. restore public confidence and trust in the financial statements of publicly held companies.
c. require all companies to prepare financial statements.
d. do all of these.

b

The Sarbanes-Oxley Act of 2002 requires companies and their independent accountants to:
a. report on the financial activities of the company.
b. report on any fraud and theft detected in the company.
c. report on the effectiveness of the company’s internal controls.
d. report on the state of the economy and likelihood of fraud.

c

One of the objectives of internal control is to:
a. prevent fraud and promote the social interest of the company.
b. control the internal organization of the accounting department personnel and equipment.
c. provide control over \"internal-use only\" reports and employee internal conduct.
d. provide reasonable assurance that assets are safeguarded.

Which of the following reflects a weak internal control system?
a. All employees are well supervised
b. A single employee is responsible for the collecting and recording of cash
c. All employees must take their vacations
d. A single employee is responsible for comparing a receiving report to an invoice

Management\'s philosophy and operating style would affect which of the following elements of internal control?
a. Risk assessment
b. Control environment
c. Information and communication
d. Monitoring

b

Requiring employees to take annual vacations is part of which element of internal control?
a. Monitoring
b. Control procedures
c. Control environment
d. Risk assessment

b

Separating the custody of assets from accounting for assets is a part of which element of internal control?
a. Information and communication
b. Control environment
c. Control procedures
d. Monitoring

c

Which of the following elements of internal control focuses on locating weaknesses and improving control effectiveness?
a. Control environment
b. Control procedures
c. Monitoring
d. Risk assessment

c

The bank reconciliation:
a. is for information purposes only.
b. is part of the internal control system.
c. should be prepared by an employee who records cash transactions.
d. is sent to the bank for verification.

b

Which of the following should not be considered cash by an accountant?
a. Money orders
b. Postage stamps
c. Travelers\' checks
d. Bank checking accounts